Let us say an average American drives 15, 000 miles per year (exact average being 16550 miles)
Let us assume price of gasoline to be 5$ per gallon (which is much higher than current price in the prevailing range of 4-4.50$ per gallon,a higher price should further support high mileage vehicles like Prius)
and try to compare the total gas expense of Prius, BMW and Corolla
  1. Toyota Prius (which gives ~ 40 miles per gallon) [source]
    Total gas consumption = 375 gallons
    Total gasoline expense = 1775$ (lets take this as our base fuel expense)
  2. BMW 3series (which gives ~ 20 miles per gallon) [source]
    Total gas consumption = 750 gallons
    Total gasoline expense = 3750$
    Extra expense over prius = 2000$Now, I assume that most BMW owners earn more than 100K (or at least pretend to do that), is 2000$ per year that big an expense to pull them away from a luxury BMW?
  3. Toyota Corolla (which gives ~ 30 miles per gallon) [source]
    Total gas consumption = 500 gallons
    Total gasoline expense = 2500$
    Extra expense over prius = 775$
    (Note: not to forget that Corolla is ~ 7000$ cheaper than Prius)
    Ignoring discounted cash flow analysis, It takes roughly 9 years for Prius to pay back the extra premium. (If we do discounted cash flow analysis, it would take even longer)
Clearly at prevailing gas prices, Prius is neither an economic choice not a luxury choice.
Is Prius a choice for environmentalists?
And some who might think that its an environmental choice must realize that “most of the pollution a car generates over its lifetime is created during the process of actually making the car” and Prius is notthe most “green” car out there.EDIT: The following paragraph has been added in response to (first) comment made by Vikram.
http://science.howstuffworks.com/science-vs-myth/everyday-myths/does-hybrid-car-production-waste-offset-hybrid-benefits.htm “If you drive both a conventional and hybrid car for 160,000 miles (257,495 kilometers), the conventional vehicle requires far more energy to operate and emits far more greenhouse gases over its lifetime, significantly canceling out any imbalance during the production stage”
The ignored “cultural” aspect
Given that 76% of americans drive alone, a simple fix of “doing car pooling to commute” will bring even a BMW at par with Prius.